final ops assignment
TRANSCRIPT
OPERATIONS MANAGEMENT
WEST BREWERY BAR AND RESTAURANT
Dr. Jillian MacBryde Dr. Robert van der Meer
Group 10
Ashok Alexander Zachariah
Bindiya Vishwanath
Ema Kalan
Pratik Jain
Saleel Borwandkar
Samir Thakran
Strathclyde Business School
Full time MBA Challum 2011-2012
Word Count: 6756
Operations Management Challum Group 10
ACKNOWLEDGEMENTS AND INFORMATION GATHERING
The group would like to thank a few important people without whose support it would
have been very difficult to generate this report. To begin with we thank Ms. Petra M
Wetzel, the owner of WEST for taking time out to meet us and respond to emails and
answer some important questions. We would also like to thank Dareus from WEST
for his insight into the brewery’s operations. Last but not least our sincere gratitude to
professors Dr. Jillian MacBryde and Dr. Robert van der Meer, for their academic
guidance and valuable feedback.
To generate this report the information had to be gathered by both primary and
secondary data collection techniques. Initially a questionnaire (Appendix B) was
drafted for the company however due to time constraints and with the Christmas
period looming they were not able to do full justice to our queries. To further
supplement our information gathering, two of the group members opted to partake of
the guided brewery tour to glean information which proved helpful. Some of the
information was sourced from the company’s website and for the unanswered
questions assumptions were made, which are listed in (Appendix C). In addition to
this, various books and journals were consulted to provide a holistic view of the
matter at hand which is included in references.
Operations Management Challum Group 10
SUMMARY
This report has been compiled to analyse various aspects of West Brewery Bar and
Restaurant such as its current operations strategy, products and services design,
process design, planning and control, innovation and improvement, supply chain and
quality management. Various models and academic frameworks such as Porter’s five
forces, Goldratt’s theory of constraints and Kano’s Model have been used to this end.
Following an analysis of WEST’s existing strategy and the techniques provided in the
‘Operations Management’ textbook by Steve Paton et al, the report highlights the
potential strengths and weaknesses in the company’s existing operations strategy
and offers recommendations for improvement. West is currently a craft brewery with
plans to expand to nearly 20 times its original size via establishment of a new plant.
The report looks at how WEST can minimize any unforeseen consequences of not
considering the impact of rapid expansion and how it can be managed. The report
also proposes an action plan for the present and future that WEST may opt to put into
place to assist in a smooth transition from microbrewery to production.
Operations Management Challum Group 10
TABLE OF CONTENTS
1 Introduction ...................................................................................................... 9
2 Operational strategy ...................................................................................... 10
2.1 WEST’s Differentiation: ....................................................................... 11
2.1.1 Product Quality: ........................................................................ 11
2.1.2 Service Quality: ........................................................................ 11
2.1.3 Order Winning Criteria .............................................................. 12
2.2 Operational strategy generation .......................................................... 12
2.2.1 Trade – Offs: ............................................................................. 12
2.2.2 Value Matrix – Simplifiers: ........................................................ 12
2.2.3 Porter’s Five Forces Model: ...................................................... 13
2.2.4 Reaching new markets ............................................................. 13
3 Product and service design ........................................................................... 14
3.1 Restaurant & bar services ................................................................... 14
3.2 New product development stages ....................................................... 14
4 Process design .............................................................................................. 16
4.1 Process ............................................................................................... 16
4.1.1 Process Map ............................................................................. 16
4.2 Type of Process .................................................................................. 19
4.2.1 Production ................................................................................ 19
4.2.2 Services .................................................................................... 20
4.2.3 Type of Order ........................................................................... 20
4.2.4 Physical Layout of the process ................................................. 21
5 Capacity planning .......................................................................................... 23
5.1 Capacity Management ........................................................................ 23
5.1.1 Adjusting Capacity .................................................................... 23
Operations Management Challum Group 10
5.2 Theory of Constraints .......................................................................... 24
5.3 Measure of Capacity ........................................................................... 25
5.4 Capacity Planning Methods ................................................................ 25
5.5 Forecasting ......................................................................................... 25
5.6 Capacity Strategies ............................................................................. 26
5.6.1 Identification of key issues ........................................................ 26
6 Innovation at WEST ....................................................................................... 27
6.1 Use of technology in process control .................................................. 28
6.2 Innovation in the brewing process ....................................................... 28
6.3 Service innovation ............................................................................... 28
7 Supply chain .................................................................................................. 29
7.1 Supply network analysis ...................................................................... 29
7.1.1 Pull and Push ........................................................................... 29
7.1.2 Logistics .................................................................................... 30
7.2 Future implications for the supply chain .............................................. 31
7.2.1 Raw material hedging ............................................................... 31
8 Quality management ...................................................................................... 32
8.1 Quality At West ................................................................................... 33
8.1.1 Deming’s Philosophy ................................................................ 33
8.2 Evolution of Quality Management at West .......................................... 33
8.2.1 Inspection ................................................................................. 33
8.2.2 Quality Control .......................................................................... 34
8.2.3 Quality Assurance .................................................................... 34
9 Discussion/analysis for the future at west ...................................................... 35
9.1 The ‘Dunkel’ case ................................................................................ 35
9.2 Challenges to growth .......................................................................... 36
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9.3 Performance management .................................................................. 36
10 Summary of recommendations ...................................................................... 39
10.1 Current Operations: ............................................................................. 39
10.2 Future Operations: .............................................................................. 40
11 Conclusion ..................................................................................................... 41
(word count – 6756 not including table of contents, headings, figures, tables and appendices)
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1 INTRODUCTION
WEST BREWERY BAR and RESTAURANT (further referred to as either WEST or
the Company) started its operations in March of 2006, built inside the historical
Templeton carpet factory building in Glasgow, the company clearly state their
mission as aiming to brew the best beer in the UK.1
WEST was Petra’s brain child following her father’s repeated complaints at the lack
of availability of good old fashioned Bavarian beer to be had in Scotland. WEST has
remedied that with combination of an authentic German recipe and fresh Scottish
water producing a beer of exceptional quality which is reflected in the brewery’s
custom.
In addition to the brewery, WEST also operates a Restaurant and Bar just above the
brewery. The bar serves other brands of beer, alcoholic and non alcoholic
beverages. Sticking to the German theme, the restaurant serves up the famed
bratwurst sausages which complement the beers on offer making the ‘WEST’
experience truly unforgettable. The food served by WEST reflects their brewing ethos
by using locally sourced natural ingredients and preparing them pure and simple.1
They also offer venue hire services in the same premises for meetings, events,
parties and weddings.
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2 OPERATIONAL STRATEGY
In a relatively short span of time WEST has made a name for itself in Scotland’s
highly competitive beer market. There are many players such as Tennants who have
already established a strong foothold in the industry. In the United Kingdom alone
nearly 57% of the breweries operating in the UK that have opened up post 2002 are
microbreweries. Hence the competition in the market has intensified 3. WEST has a
clearly defined operations strategy which enables it to compete effectively in the beer
market.
When questioned about the approach the company has taken towards its operations
strategy, the management at WEST after considering different approaches reflected
by Slack and Lewis, confirmed that WEST follows the ‘top down’ approach, which
means that WEST derives its operational strategy from its business strategy.
Drawing on the above information and relating it to the Hayes and Wheelwright
model as depicted in Figure 1, WEST lies in Stage 3 which is the ‘Internally
Supportive’ position. At this stage, operations are completely integrated with the
business strategy.
Figure1: Contribution of operations to strategy (Hayes & Wheelwright, 1988)
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2.1 WEST’S DIFFERENTIATION:
West has always had a unique selling point which they have consistently leveraged,
the finest lager brewed in Scotland (and possibly the UK) - their positioning has
always been one that of not being for the “masses”, adopting a policy similar to what
Jack Daniels adopted in the early 50’s and late 60’s – exclusivity, word of mouth
publicity & quality over quantity16. These advantages have served them well, and
have helped them develop a loyal customer base which they can use to springboard
into wider markets.
2.1.1 Product Quality:
WEST defines product quality using two benchmarks which they lay equal emphasis
on. First, how the product adheres to the requirement or the standard set internally;
second, how good the product is in meeting the expectations of customers. With
respect to the internal quality requirement, it is the only brewery in the UK that brews
its beer according to the German purity law. It has advanced quality control and
measuring instruments which measure the quality of the beer produced in continuum.
WEST proffers a large variety in its product offering which allows them to cater to a
wide range of palates as detailed in Appendix A. In addition to this a new 4% ABV
beer is in the pipeline which has been temporarily named ‘Opus’ which aims to
penetrate the existing standard beer market of 4% Alco beers.
2.1.2 Service Quality:
In relation to WEST’s service delivery, it is of an exceptionally high standard in terms
of quality. This can be clearly gauged by the service standards of the restaurant
above the brewery. The following intangibles highlight the service quality:
Responsiveness: Staff in the restaurant is always willing to help customers with all
their needs. They provide the customers free ‘tasters’ of beer for them to try it before
they order especially important when trying to promote the in-house brewery. This
specialized service gives the customer an opportunity to select the beer according to
their taste prior to ordering.
Reliability: WEST has maintained a high level of consistency in their product taste.
Its customers can look down into their brew house from the beer hall above and
watch the brewers at work which enhances reliability and increases trust.
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Assurance: Staff in the brewery not only sells the beer but also provide them with
interesting titbits about their preferred choice of beer. This also instils assurance
amongst its customers about the quality of the product at WEST.
2.1.3 Order Winning Criteria
The features that enhance WEST’s products is what is classified as order winning
criteria and can be identified as follows
• Quality is ensured with the German purity law attached to its name.
• With the wide range of product mix, WEST caters to a large base of customers.
• Customers have the flexibility of drinking freshly brewed beer straight from the
brewery or in the comfort of their own home
2.2 OPERATIONAL STRATEGY GENERATION
Certain aspects that are considered during operational strategy generation are trade-
offs, the organizations current value proposition, what it can offer in the future and how
the external factors may influence the need for change. The value matrix is more
specific in nature than Porters generic model and focuses on the market segment
externally while internally allowing alignment of operational strategies
2.2.1 Trade – Offs:
Quality vs. Shelf Life: An important trade off in the beer industry is quality against
shelf life. WEST prefers not to add preservatives to its beers (due to compliance to
the German purity law) thereby keeping the quality high but reducing the shelf life.
Operating cost vs. Variety: Another trade off in the beer industry is operating cost
against variety. However WEST has achieved a low cost of operating without trading
off variety in its product offering which has been achieved by using recycling
production methods.
2.2.2 Value Matrix – Simplifiers:
WEST, by conceptualizing the idea of serving beer and food, right above its brewery,
has made the buying process relatively easier and convenient for its restaurant
customers. This also eliminates the third parties involved in the supply chain and the
associated costs.
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2.2.3 Porter’s Five Forces Model:
Figure 2 below shows the forces or key elements that should be taken into
consideration while devising any business strategy for the present as well as the
future to ensure long term success. As mentioned earlier WEST follows a ‘Top Down’
approach which would directly result in these factors influencing its revised
operations strategy.
Figure 2: Porters Five forces Model’s impact on WEST
2.2.4 Reaching new markets
Although analysts believe that beer consumption has stagnated in few countries, it is
rising in some other countries. In order to take advantage of the changing trends in
the beer market, it is important for the company to look beyond its traditional
customer base in UK. Beer consumption in Italy is increasing at a faster pace
compared to that in other west European nations. The volume of sales in beer and
cider (see Appendix D; Tables 1 & 2) indicates that consumer preferences are
changing rapidly, combined with a dearth of choice launched by various competitors
it is imperative to sense future trends and act accordingly.7
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3 PRODUCT AND SERVICE DESIGN
WEST’s target market is presently is its own bar, other bars within Glasgow and
Scotland. The company aims to expand to the rest of the UK and Europe keeping
that in mind it is establishing a new brewery with almost 20 times the existing
capacity. It is also developing a new product which will conform to the industry
standard of 4% ABV beer and will be targeting supermarkets and bars in other parts
of the UK. The company is also targeting distributors as far away as Italy which
reflects the company’s ambitions of going global.
3.1 RESTAURANT & BAR SERVICES
Touching upon the services and service design, the company has designed its
services based on the industry standards and is constantly improving by observing
regular feedback from customers. Service operations are restricted to the single
restaurant and venue (for hire) that the company owns and these service operations
are discussed in detail in other sections of this report. The organization currently has
no plans to develop other branches of the restaurant and wish to focus on expanding
the brewery. WEST’s services reflect the ethos of their brewing process ‘keeping it
simple and pure’.1 this maintains consistency and quality across their services and
helps the company achieve an overall strategic vision.
3.2 NEW PRODUCT DEVELOPMENT STAGES
As previously mentioned, WEST is currently developing a new product. While
developing this product (and other products in the past) the company has stuck to its
German roots. A four step process followed by the company for development of new
product is simplified in Figure 3 and elaborated below.
Figure 3: Phases of product development
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WEST follows the process of brewing strictly as per Reinheitsgebot, which infers that
they are allowed to use only the purest ingredients, i.e., water, malt, hops and yeast1.
The quantity and blend of each of these is changed in each of the recipes. This stage
can be categorized as R&D (making a recipe), planning and concept development
(Phase 0 and1) in a new product development cycle.
This is followed by application of the recipe in larger volumes. At this stage exact
quantities are decided, sources of ingredients identified (mostly imported from
Germany and England) and production blue print is prepared. This stage can be
related to ‘System level design and Detailed design’ (phase 2and3) generating a ‘Bill
of Materials’.
Once the initial designs and plans are ready the actual brewing is done and at 3
different stages of brewing random samples are taken for taste tests to ensure
consistency. Once the final beer is ready a panel of customers are called in for a
tasting to get feedback. This stage corresponds to ‘Testing and Refinement’ (phase
4).
Finally the beer is produced on an industrial scale, regularly sent for bottling for
onward transportation to various bars and retail outlets. This relates to the final stage
of ‘Production ramp up’ i.e., Phase 5 in the new product development. WEST has
blended the manufacturing – service mix well and both functions while complimenting
each other work fairly independently. There are no major operational challenges due
to this mix as roles of staff under both functions are very clearly defined.
WEST also organizes tours of its facilities for customers to educate them about the
process and provides beer samples to customers to get feedback. This feedback is
vital for checking consistency and improving processes which are elaborated in the
following section.
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4 PROCESS DESIGN
WEST has designed and implemented Systems thinking with focus on operations of
the entire organisation i.e. it looks at the holistic picture of the organisation which
includes both production and service centre.
The functions involved in operations of WEST can be divided into the following;
Primary, Support and Management Process.
• Primary Process: Planning, Brewing, Packaging, Distribution, Sales, Service
• Support Process: Procurement, Inventory Control, Finance and Accounting
and HR
• Managerial Process: Innovation, Production Planning, Quality and
Performance Measuring
4.1 PROCESS
WEST is involved both in production as well as services. A part of the output of
production is a portion of the input for the service as well. Having a restaurant in the
brewery certainly is an advantage for WEST as the restaurant is able to champion
the brewery’s produce.
4.1.1 Process Map
The process map was designed to investigate gaps in the process flow. The only
source of concern was that the same set of machinery has been used to produce the
range of beers in WEST’s portfolio. So at a time only one variety of beer can be
produced. Indicated in Figure 4 is the process flow as at the brewery, and can be
identified that the residuals are reused or sold i.e. the spent grain is sold to local
farmers as animal feed. WEST follows zero emission policy where the residual steam
during boiling is converted into hot water and used for the next brew. Figures 5 and 6
also depict the production and service process
.
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Figure 4: WEST Process map
Start
Supply beer to 110 bars in
Scotland and also for the
restaurant run by WEST
Customer
Order
Yes Supply to
customer
No
Check
availability of
stock
Raw Material
Finished Beer
Delivery to customer
End
Malt and Milling
Mashing
Lautering
Wort Boiling
Whirlpool
Cooling
Fermenting
Spent grains
sold to local
Solid proteins &
hops by product
separated
Residual steam
recycled
Recycled hot water
Start/Finish
Process
Data
Decision
Preparation
By Product
Key
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Figure 5: Production process
Figure 6: Service process
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4.2 TYPE OF PROCESS
4.2.1 Production
WEST produces 6 different kinds of beers, there is manual intervention and the
comparative volumes are not very high. As such the process followed by WEST can
be classified as ‘Batch Process’, as indicated in Figure 7.
Figure 7: Volume and Variety: The impact upon process definition (adapted
from Hayes & Wheelwright, 1979)
Each type of beer produced may be considered to be a batch. The process moves
between different work-cells such as malting, milling, fermenting etc through the
process based on each product recipe. This being a batch process there are lower
task specifications i.e. the equipment and automation of process can be altered as
per requirement. In this type of process a careful layout of the work cell and
sequencing of activities is very important. The transition of WEST from a batch
process to a continuous process type has been further discussed in Section 9.2.
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4.2.2 Services
Based on the degree of labour intensity, interaction and customization WEST falls
under the Service Factory level, as shown in Figure 7. At WEST customer interaction
is on a daily basis because of the restaurant but the beer making process is
standardised which means there is less scope for customization as per customer’s
requirement unless specifically requested. The process is not very labour intensive
as it is partially automated.
Figure 8: Service Process Matrix (Schmenner, 1986)
The future expansion of WEST would not have a major impact on its restaurant
business. As the company is still in the initial stages of operation having a restaurant
in the brewery produces a readymade clientele.
4.2.3 Type of Order
The type of order procedure followed by the brewery is ‘Made to Stock’. Beer is
produced 4 days a week with respect to demand. The beer is then left for 3 to 5
weeks for fermentation. Companies producing higher volumes usually finish this
process within a week or in some cases even sooner.
Presently WEST do not have a clear strategy for forecasting demand. Efficient
technological tools are not available for inventory management or capacity planning
facilities to arrive at a calculated estimated demand. This function is currently fulfilled
based on organizations past experience and gut feeling which can prove
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counterproductive as in the ‘Dunkel’ case. Production of St. Mungo beer is the
highest due to the demand associated with it. Once the beer is produced it is
stocked and supplied according to demand. However, henceforth WEST may have to
devise strategies for improving forecasting methods to ensure continued supply.
Figure 9: Made to Stock Process
4.2.4 Physical Layout of the process
As previously mentioned, both restaurant and production centre occupy the same
premises with the restaurant on the ground level and the production centre (brewery)
in the basement.
Space is at a premium on the shop floor resulting in shortage of storage space.
Machinery is located based on the process flow of production, as indicated in Figure
10. Hence there is optimum utilization of space which also reduces time taken for
man-material movement and eliminates non value adding activities.
The brewing process is not completely automated as there is still a minimal amount
of manual intervention. This causes disruption in the continuity of work flow which in
the current situation is unavoidable as the same machinery is used to produce all
kinds of beer. Lack of space restricts the scope of complete automation of the
process.
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Figure 10: Brewery process layout
As the same equipment is used to produce all the products, special attention is
necessary for each product in relation to routing, scheduling and machine set-up
which highlights the importance of ‘Planning and Control’.
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5 CAPACITY PLANNING
According to Nigel Slack “Planning and control is concerned with the reconciliation
between what the market requires and what the operation’s resources can deliver”.6
Efficient planning and control systems allows for optimization of operational
processes in an organization of any size. Planning and control systems are crucial to
micro-breweries such as WEST as their products have a short shelf life and therefore
require effective facilities in place to bridge the gap between demand and supply.
5.1 CAPACITY MANAGEMENT
The capacity at which an operation can transform inputs or raw materials to outputs
or finished products is vital to any organization. Careful monitoring and planning can
help reduce unwarranted costs and streamline the business to perform more
effectively and efficiently.
At their current capacity, the company can produce 300,000 litres of beer a year.
With growing demand and plans of commercializing the product range through large
super markets chains like “Waitrose” the organization needs to reorganize and
restructure its capacity.
5.1.1 Adjusting Capacity
In its quest to adjust capacity the company is limited by many constraints. If these
constraints were to be looked at it would be clear what steps WEST could take to
improve capacity.
• Introduce new methods and resources
• Increase operational hours
• Increase machine capacity
• Securing supplementary facilities
The German purity law prevents the organization from using artificial colouring and
additives which can help speed up the process of manufacturing the beer and
prolongs the production process, taking up to three to five weeks at a time depending
on the beer being brewed, which has a knock on effect on the futility of attempting to
increase the operational hours. . As such if they wish to increase capacity they will
have to increase the size of their plant.
The company could increase the level of production and would be able to match the
rising demand for the product, by increasing the capacity of the machinery. The only
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disadvantage is that the current location would not be able to accommodate the
larger machinery which needs to be installed.
To meet the long term objectives of the company, they would have to look at
acquiring additional facilities which would be able to accommodate the large
equipment and machinery required to increase the capacity without compromising on
the quality of the beer. This would involve substantial investment, which the
management could face problems with.
5.2 THEORY OF CONSTRAINTS
The above constraints limit the company’s ability to develop and adjust its capacity in
line with growing demand. If the company were to use Goldratt’s “Theory of
constraints” (TOC)7 they could focus their resources on the most pressing problem
and address the same as shown in Figure 11 below.
Figure 11:Constraints for WEST’s expansion
It is evident that for West Breweries to increase their capacity they are constrained by
lack of funding, limitation of facility and increase in the capacity of machinery. These
bottlenecks must be addressed to improve their operational efficiency.
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5.3 MEASURE OF CAPACITY
The current level of production is 1500 litres, while the design capacity of the current
machinery in use is approximately 2000 litres per day. Considering the fact that every
3 months the plant is shut for one week on account of maintenance, with wastage of
100 litres in production, the effective capacity of the machinery should be 1900 litres.
The design capacity of the plant is the output the machinery is capable of delivering
and the effective capacity is what the company wished to achieve, whereas the
actual capacity is what the company is currently running at.
5.4 CAPACITY PLANNING METHODS
At WEST there are no formal planning methods adopted. Typically the capacity tends
to lag demand; output is increased based on the increase in demand. The brewery
struggles to match demand as most often they are constrained by the capacity of the
machinery, shortage of storage space and also by the stringent quality norms, which
delays the brewing process. The brewery does not have the machinery to brew all
the beers simultaneously. Each beer is made in batches using the same machinery
as a result they are often left short or with no supply of a particular type of beer.
5.5 FORECASTING
There is no prescribed qualitative or quantitative forecasting which is carried out at
WEST. The organization attempts to brew the respective beers that are running low
in the inventory. This approach could have serious repercussions with regards to the
operational aspects of the business. The company currently faces a problem due to
the lack of forecasting. “Dunkel” a beer they brew is presently out of supply due to an
unexpectedly high demand. When an attempt was made to increase the capacity of
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production, unforeseen maintenance work on the machinery brought the production
to a halt. Since the company follows the German purity law, they were unable to
speed up the process. It is believed that it would take as long as 5 weeks before the
first batch could be kegged. This has left them crippled as they are unable to satisfy
the customers demand.
5.6 CAPACITY STRATEGIES
WEST tries to expand and contract its capacity based on inventory levels. To follow
the ‘chase demand strategy’ there should be considerable planning in the process
design, staff training and inputs. The biggest problem faced by them is that since it
follows the ‘Reinheitsgebot’ standards, the time taken for production cannot be
altered. Regular beer manufacturers take less than a week to manufacture beer, by
adding additives to speed the process. One of the unique selling points of the WEST
is its adherence to quality. If WEST decides to compromise on quality, it could impact
the image of the brand. WEST needs to focus largely on planning its production
operations and invest time in better forecasting methods to improve its operational
efficiency. The concerns reflected in this section make it important for the company to
be open to ‘Innovation and Improvement’, which is covered in the next section of the
report.
5.6.1 Identification of key issues
It is necessary to focus on raising substantial capital to invest in both a larger facility
and higher capacity machinery. Without the ability to increase the capacity of the
plant WEST will find it difficult to compete in the wider market
The level of utilization of the machinery at the brewery is only 75%. The company is
running its machinery operation at 62% efficiency, leaving more scope for
improvement. The organization’s objective should be to lower the level of wastage
and decrease the maintenance down time, which would improve the overall
operational efficiency. It would be advisable to acquire dedicated machinery for beers
that are in high demand, dedicate batch production to low demand beers thereby
assisting in expanding and contracting their capacity based on the elasticity of
demand.
Utilization of data management resources in projecting estimates & analysing trends
will help WEST in improving operational efficiency.
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6 INNOVATION AT WEST
Commitment to innovation and investment in new technology are the two primary
reasons for WEST’s success so far. WEST’s constant drive for improvement in
operations and improved services can be likened to Deming’s continuous
improvement cycle.
Figure 12: Deming Cycle of Improvement
Although WEST does not have a formal innovation management programme,
innovation consciousness is reflected throughout the work culture and achievements
so far.
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6.1 USE OF TECHNOLOGY IN PROCESS CONTROL
The management at WEST has made constant efforts to use cutting edge
technologies in controlling the brewing process, an essential strategy for consistency,
reliable quality and cost reduction.
6.2 INNOVATION IN THE BREWING PROCESS
Some of the key automation processes includes extraction measurement throughout
the brewery by using mass flow metering technology, energy management, brew
kettle, and filtration optimization controls, as well as more consistent fermentation
controls, thereby reducing the human errors as well as unnecessary delays and
wastage. Apart from control instrumentation the WEST brewery has also invested in
the heat and water recovery systems. Through heat recovery in the wort boiling
process, WEST saves approximately 25% in energy costs. The brewery is one of the
few to implement steam conservation, wherein steam is utilised and recycled as
much as possible, resulting in environmentally sustainable production.
For its new manufacturing set up, WEST has invested in state of the art process
technology which will reduce the specific water consumption from 5 litres of beer to
2.5 litres of beer, adding to its reputation of being environment friendly. Responding
to increasing customer demand WEST has decided to launch a new product; a 4%
lager beer which conforms to market standards for everyday casual consumption
which has tentatively been named ‘OPUS’.
6.3 SERVICE INNOVATION
Further to other service aspects covered in the earlier sections of this report another
innovative service initiative by WEST is that it is amongst one of the few restaurants
to allow pets, a significant distinguishing value offered to the customers who come
along with their pets for a walk at Glasgow green.
To date WEST has managed to keep pace with the changing consumer demands
and has created a good image among its consumers, known for its unique taste,
consistent quality and award winning services, the company will have to ensure
efficient operations while simultaneously focusing on constant innovation.
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7 SUPPLY CHAIN
This section looks at the supply chain as indicated by the company, its identification
and origin, the commodities that are processed, and how value is added through the
system.
7.1 SUPPLY NETWORK ANALYSIS
The Company has indicated that the base malt is sourced from Norfolk in the UK,
specialist malt from Bamburg, Germany and hops from the United States and the
water comes from Loch Catrine.
Machinery is maintained 2-3 times a year, during which production is
halted. The beer bottling process as well as brewing the beer for
bottled consumption is outsourced. The company is dependent on
third party logistics for supply chain assistance.1
A brief overview of characteristics that make a supply chain distinctive are; (Steve
Paton, 2011)
Effectiveness Efficiency Capacity Quality Response time Flexibility
To an organization that is involved in the beverage industry it would be safe to
assume that the quality of the materials being sourced, the response time and
flexibility of the suppliers is of utmost importance.
With expansion plans on the horizon (location unknown), it is assumed that ‘West’
would move all its production to the new premises, allowing the brewery below the
pub to remain as a showcase, and providing a novelty factor, while simultaneously
producing a minimal amount for the restaurant and the rest done at the new plant.
These developments would greatly affect the currently established supply chain.
7.1.1 Pull and Push
As ‘WEST’ has launched a new product into the existing market with no actual
demand, it is evident that a ‘push’ process would have been executed in anticipation
1 Sourced during brewery tour interview
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of the customer order. Once the customer has experienced the product depending on
the quality it is then expected to have a ‘pull’ effect on the supply chain process. The
organization would then have to be proactive and carry out production due to real
time demand within the supply chain to meet customer demand. The plans for
expansion have come to fruition largely due to a pull effect created by the customer.
7.1.2 Logistics
Some of the aspects that fall under the realm of logistics, costs are transportation,
facilities communications, inventory, material handling packaging and management.
It has been pointed out that ‘WEST’ is dependent on third party logistics for the
brewing and bottling of their bottled beer product range as they supply beers to 110
different distributors, Waitrose and other independent retailers.
WEST has also incorporated two forms of integration within a short period of time, by
opening a restaurant and pub to showcase the beer brewed and the brewery which is
a form of vertical integration and horizontal integration respectively is exhibited by
expanding the capacity to meet forecasted demand in the form of a new plant.
Figure 13: WEST Supply chain
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7.2 FUTURE IMPLICATIONS FOR THE SUPPLY CHAIN
With the expansion of West on the horizon and the subsequent complexity and
demand for new products grow it is advisable to introduce flexibility into the existing
supply chain in order to respond faster to the market. With the popularity of ‘WEST’
beers increasing and the advent of the new plant which will aim to increase the
current production capacity by twenty times it is of utmost importance to have a
responsive supply chain in place. With increasing demand for raw materials for the
new plant, an important issue that rises is whether the current supplier will be able to
keep up with their demand.
A recent visit to the brewery highlighted the fact that they had run out of a particular
beer – ‘Dunkel’. Further investigation revealed that the organization had run out of
inventory which highlights the lack of forecasting methods. It also highlights the fact
that inventory based systems often hide a deeper problems, and also creates more
problems than they solve12. Further complicating the issue was there was
maintenance required at the filter between the whirlpool and fermenting cells.
Therefore as a solution it is possible to reduce the supply chain cycle time, to prevent
further similar incidents. This can be done by improving the supply chain network
design as in how fast goods can be moved from point to point, simplifying transaction
processes and incorporate a pull based replenishment system to allow greater
flexibility in production in sync with seasonal demand.
7.2.1 Raw material hedging
The beer industry is susceptible to variations in international barley prices, following
two successive years of respectable harvest, the barley harvest this year is expected
to drop. The impact of low barley production would be reflected in increased raw
material cost for WEST. Being a microbrewery WEST has high dependency on low
cost and regular supply of raw material for maintaining its profitability. It is
recommended that WEST consider the possibility of long term supply agreements
thereby insulating itself from fluctuations in barley prices.8
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8 QUALITY MANAGEMENT
In a customer centric business, quality is of utmost importance, as in the end it is the
customer that judges the quality of the end product, i.e. the beer, the success of
which is what maximizes the profit. The Kano model is a basic model of excitement
and quality, which states the obvious, i.e. good quality never, fails to disappoint.
Figure 14: Kano’s Model of quality & excitement
Following a brief interview with key personnel at ‘West’ at
present there are only internal quality checks done via a
system designed in house. Apparently there is no cross
check of efficiency of the production system. There is no
formal training in place at the brewery, and the staff is trained
by the head brewer and the ancillary staff is trained
internally.2
From the above it is apparent that the brewery uses the most basic of quality
systems to ensure the tenacity of the product. Deming’s simplistic approach to quality
can be identified as the key cornerstone of this particular operation13, where ‘WEST’
2 Sourced during brewery tour interview
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is not merely satisfying the customer but also attempting to exceed their
expectations, by positioning themselves as a Glaswegian brewery with German
expertise, and attempting to uproot the competitors such as ‘Tennants’ and Brewdog’
8.1 QUALITY AT WEST
Quality management can be a daunting task as the perception of quality is intangible
and is constantly comparable, while the process involved are not.
8.1.1 Deming’s Philosophy
Deming’s philosophy is associated with the continuous cycle of improvement as
depicted in Figure 13; which highlights the 4 actions – Plan, Do, Check and Act. As
the steps suggest the process involves carefully planning the operation, putting the
plan into action, measuring the processes involved against the expected output, and
finally investigating the differences between the desired and actual product. From the
interviews carried out it is evident that at West the quality management is a simple
process, which may be maintained with no serious consequences as long the
brewery remains at its current capacity. In the event of expansion which is on the
cards in the future it would be naïve to expect the current quality system to not burst
at the seams.
8.2 EVOLUTION OF QUALITY MANAGEMENT AT WEST
For future operations at ‘WEST’ it is recommended prior to expansion that the
organization look at implementing a total quality management system to ensure a
standardized process, thereby allowing a hands-off approach. The total quality
management system embraces all aspects of inspection, quality control and quality
assurance – a holistic approach that involves the whole organization13.
The main principles of TQM can be summarized as being customer focused, an
environment of leadership, the wholehearted involvement of personnel, a process
approach, systems approach to management, continual improvement, factual
approach to decision making, and mutually beneficial supplier relationship.
8.2.1 Inspection
According to Paton (2011) inspection is the simplest process of a quality system. In
the beverage production industry there is a deluge of legislation that is required to be
in compliance with, for example the health and safety, sanitation standards. With the
expansion in view it would be a sensible decision to formalize the process.
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8.2.2 Quality Control
This is a system designed to detect problems within the quality system and process
as they occur with reference to the operational aspect of the production system.
Incorporating the ISO standard provides a systematic framework for establishing and
maintaining a documented quality system15.The yeast required for the process of
fermentation is used for seven iterations, and the eighth iteration uses a fresh batch
to ensure the quality of the beverage. It is necessary to standardize this type of
quality control process which can lead to an industry wide recognized standard that
ensures conformity to assure customers and industry peers.
8.2.3 Quality Assurance
Quality assurance ensures repeatability and reproducibility conditions as well as
consistency is recreated for every batch that is produced by the brewery. Quality
assurance lends itself to ensuring Total quality management. Further to the TQM
program, Six sigma can be the natural progression, as the latter is an evolution of the
former and involves statistical analysis as the backbone of the quality management
program, which can prove advantageous to the organizations growth from a craft
brewery to mass production
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9 DISCUSSION/ANALYSIS FOR THE FUTURE AT WEST
The problem facing most SME’s when attempting to expand is maintaining the same levels
of operational excellence on a larger scale. The core competencies and initial alignment of
purpose is easily lost in the melee.
As with a company like WEST that has a singular uniqueness to is easy to lose sight of the
initial vision in the heat of rapid expansion. Going from creating a specialist beer to looking to
tap into a fiercely competitive market for customer’s taste buds and profitable supermarket
shelves it is possible that WEST might undermine their initial success.
During expansion WEST must decide what to focus their superior performance on, which
should be either of the following three issues, with the consequence that they might spread
themselves too thin
• Operational excellence (cost)• Customer intimacy (satisfaction)• Product leadership
West has recently encountered a shortage of a specific beer called the ‘Dunkel’. This
incident is further investigated in the next section to examine the shortcomings of the
decision making teams and how performance management may be able to prevent repeated
occurrences.
9.1 THE ‘DUNKEL’ CASE
‘Dunkel’ is one of the six frequently produced beers at WEST. A recipe unique to WEST,
comprising of a special blend of five malts with an ABV of 4.9%, has proved to be a popular
request at the bar.
An interesting fact was highlighted during the tour that the brewery had run out of ‘Dunkel’.
Further investigation revealed that the organization had run out of inventory, the decision to
produce the particular beer was taken by Ms. Wetzel highlighting the lack of proper
forecasting tools or use of a market based approach in production decisions and hence
caught unawares at the lack of inventory indicating the lack of coordination between
inventory stocking & production. Complicating the issue was the fact that maintenance was
required at the filter between the whirlpool and fermenting cells which held up production.
Currently the waiting time for the next batch of ‘Dunkel’ is three weeks. Recommendations
have been made in section 10.1 for the issues highlighted above.
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9.2 CHALLENGES TO GROWTH
With the expansion WEST will be attempting to target a mass market rather than a niche
market, to which various contributing factors may need to be adapted to suit
The expansion plans will allow the company to increase the volume of beer produced which
indicates that the organization will move from batch processing to a continuous process as
indicated in Figure 6 (Volume/Variety mix). This will allow complete incorporation of
automated process minimizing the need for manual intervention, and allowing WEST to
exploit the profitability of a low cost operation. However setting up a continuous operation
tends to have a high initial set-up cost, and operate at high volumes, WEST would therefore
have to be absolutely certain of the order outlay from the expected distributors or else they
could end with an immense stock of inventory which could prove hard to dispose of. They
would also be wise to invest in demand forecasting software analysis to ascertain
predictability of market demand.
The expansion could also allow for market penetration in various geographical locations
outside the United Kingdom, but this would mean that further investment would be required
with regards to innovation of a product mix to enable WEST to adapt to differing customer
tastes. However this also poses an interesting problem as to how WEST aims to secure a
customer base, as they have not invested in creating a brand image or name that their
products can be related to. The move into external markets highlights the need for WEST to
also align the business and operational strategy to position the brand
9.3 PERFORMANCE MANAGEMENT
As previously discussed WEST follows a ‘top down’ approach, which has so far worked well
for a company that employees just over 50 people. The business and operation strategy is
the vision of a single person - Petra. What are the consequences for the company as a
whole in the absence of this person’s vision or drive? Putting into place performance
measuring and management tools will ensure that the organizations operational targets
remain aligned with the business strategy no matter who is at the helm.
Performance management can be used to sustain competitive advantage by focussing on
the objectives, strategy, critical success factors, and the measures & accountabilities as
identified below.
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Figure 15: Sustaining competitive advantage via Performance Management
In order to maintain the operation excellence it may be necessary to change the hierarchical
structure at WEST in order to be able to dedicate an equal amount of time and energy to
both enterprises i.e. the brewery and the new plant as the performance goals for the two
entities may be as different as chalk and cheese. As the craft brewery may wish to focus on
product leadership and quality, while the new plant may have prime focus on the operational
costs.
Key variables that determine performance have been identified throughout the report at
various points, some of which are the maintenance and financial constraints, higher
unexpected demand for certain beers
A balanced scorecard measures the achievement of the business strategy, and it can also
serve to communicate the organizations business and operational strategy to every level of
employee within an organization something that has been identified as lacking at WEST.
Kaplan & Norton suggest that the score card be used for a year or so to have confidence in
the indicators to ensure the measures are appropriate for the purpose13.
Each aspect of the scorecard looks at the goals and measures of each perspective as
indicated in Figure 18, which are the financial, customer, internal and innovation & learning
perspectives.
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The financial perspectives may look at the profits that can be expected, how the
shareholders view the performance of the company, whether the strategies that are outlined
meet the expectations outlined by the shareholders and stakeholders.
Similarly the customer’s perspective is of utmost importance to ensure WEST’s strategy
alignment in order to meet the customer’s preference, which can be accomplished by
introducing a product mix that appeals to a wide range, in addition to the brewery tour.
Various measures can be put into place to determine the success fine of the product mix
goal by introducing feedback, interactive sessions either in person or exploiting the reach of
social media. The customers perspective can differ depending on the market segment and
geographical locations that WEST decide to target.
Figure 16: WEST’s Balance scorecard (Kaplan & Norton, 1996)13
The internal business perspective, innovation & learning perspective must highlight the
incidents that cause setbacks at WEST which the organization and employees must attempt
to excel at to provide a streamlined process. Both aspects can be improved upon by using
benchmarks to define the present conditions with other similar organizations within the
industry such as ‘Brewdog’, the ‘Arran Brewery’, the ‘Black Isle Brewery’ to name a few.
Using the process of benchmarking, factors such as quality, employee skills and productivity
can be improved upon which can prove beneficial to WEST.
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10 SUMMARY OF RECOMMENDATIONS
Based on the observations and analysis carried out in this report the below
recommendations are proposed with a corresponding action plan to improve the
operational performance at WEST:
10.1 CURRENT OPERATIONS:
Recommendation Plan of Action
Better demand forecasting Collection and analysis of data, use of
quantitative method for demand forecasting
Wastage reduction during brewing for
maintenance
• Planned maintenance between processes – 2 weekly intervals, or prior to batch initiation
• Decide preset point of time based on experience
1) Maintain a filter inventory
2) Modifications in equipments
3) Hard time/On condition maintenance
Flexibility in supply chain 1) Forecasting of Raw Material
2) Good relationship with the suppliers
3) Flexibility to supply more/less quantity
Standardise quality program 1) Formalize a standard quality program
2) Affiliation to International quality standards-
ISO, six sigma
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10.2 FUTURE OPERATIONS:
Recommendation Plan of Action
Top down approach to Market
Based
Study, survey, analyse consumer
preference and follow market trends
Dedicated production line for high
demand beers
1) Capacity addition
2) Supply chain management
3) TQM (Total Quality Management)
4) Upgrade and automate the plant
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11 CONCLUSION
WEST is arguably one of the most dynamic and progressive microbreweries in the
UK. The WEST brand is built on the solid foundations of quality, however in near
future the company must device a clear and formal operation strategy to ensure that
quality is maintained even after the planned expansion. The company has to be
innovative in its approach to ensure it maintains high quality when targeting
customers outside its existing market in Scotland. Performance management is a
means of ensuring that the operation strategies are aligned with the company’s
mission even during the expansion phase with the aid of consistent decision making
The brewery is moving from a highly specialised niche market, to the mass market,
expansion at such a large rate in the most difficult of economic conditions i.e. during
a deep set recession in the U.K can prove to be a rocky path to navigate. Customers
that have come to identify WEST as an experiential quality service, will also expect
the ‘Opus’ 4% ABV to provide the same, which may prove a tall order to fulfil,
however it is by no means an insurmountable task with the right measures in place.
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BIBLIOGRAPHY
1. Official Website of West Brewery
www.westbeer.com
2. Operations Strategy, Slack and Lewis, Pearson Education Ltd.
3. Local beer brewing report, 2011 – Published by SIBA, the Society of Independent
Brewers.
4. http://cws.cengage.co.uk/barnes/students/sample_ch/ch2.pdf
5. Operations Management 6th Edition, Nigel Slack, Stuart Chambers, Robert Johnston,16th Dec 2009, Pearson Education
6. The goal: A process of ongoing improvement, 2nd revised Edition, Goldratt, E. M., and Cox, J. 1992, North River Press
7. Data monitor, future trends in beer and wine, market overview, 24/11/2011
8. Black Book - Four Ways to Play Soft Commodity Inflation, 2011, p71-84, 14p, 2 Charts, 21 Graphs https://web.ebscohost.com/ehost/results
9. The Globalization of the Brewing Industry: A New Competitive Landscape, June 2004, ARC Advisory Group, www.ARCweb.com, 25/11/2011
10. Hau L.Lee, P.S.S.N.S.d.T.and.L.T. (2010) 'Radically Reinvent your supply chain', Harvard Business Review, 1 October, pp. 62-84.
11. Lawson, R.H. (2002) Strategic Operations Management, 1st edition, London: Routledge.
12. Randy Garber, S.S. (Jan/Feb2007) 'Want a more flexible supply chain?', Supply Chain Management Review , vol. 11, no. 1, pp. p28-34, 6p.
13. Steve Paton, B.C.J.H.A.P. (2011) Operations Management, 1st edition, Berkshire: McGraw-Hill Higher Education.
14. Tontini, G. (Aug2007) 'Integrating the Kano model and QFD for designing new products', Total Quality Management and Business Excellence, Issue 6 Vol. 18 , pp. p599-612.
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15. Rodney McAdam, N.J. (2002) 'A sectoral study of ISO 9000 and TQM transitions:
the UK and Irish brewing sector', Journal of manufacturing technology
management, pp. 255 - 263.
16. CNN Money http://management.fortune.cnn.com/2011/12/08/jack-daniels-jim-stengel-grow/?iid=SF_F_River
Additional references:
1. Operations management – Nigel Slack, Steward Chambers, Robert Johnston, 4th
Edition http://wps.pearsoned.co.uk/ema_uk_he_slack_opsman_4/17/4472/1144851.cw/index.html
2. http://highered.mcgrawhill.com/sites/dl/free/0070922837/158533/sample_ch2.pdf
3. http://media.wiley.com/product_data/excerpt/31/EHEP0003/EHEP000331-2.pdf
4. Beer Industry Profile: Global, Sep2009, p1, 36p, 6 Diagrams, 14 Charts, 11
Graphs http://web.ebscohost.com/ehost/pdfviewer/pdfviewer?sid=768672c0-0869-4517-80aa-7ca5d6a56d46%40sessionmgr104andvid=1andhid=113
5. Michael J. Lewis http://www.probrewer.com/resources/library/bp-
qualitycontrol.php
6. Nelson, Peter. Food Service, Feb2008, Vol. 6 Issue 1, p23-23, 3/4p,
http://web.ebscohost.com/ehost/pdfviewer/pdfviewer?sid=b44f1874-a85c-4988-9b10-dd4d32cc5732%40sessionmgr110andvid=1andhid=110, 24/11/2011
7. British brewing industry- 30 years of environmental improvement,
http://www.beerandpub.com/documents/publications/industry/BBPA%20Enviroment%20Bk%2030%20years.pdf
8. Report on new perspective for beer industry,
http://samplecode.rockwellautomation.com/idc/groups/literature/documents/wp/bev-wp001_-en-p.pdf
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APPENDIX A: BREWERY PRODUCT OVERVIEW
The Brewery produces six different types of beers:
1. St. Mungo – the flagship brand of WEST with 4.9% ABV content is the most
popular of the products. This product has made its way on the shelves of Tesco
and many reputed pubs and bars in Scotland.
2. Dunkel – a unique recipe, a special blend of 5 malts with 4.9% ABV.
3. Munich Red – slight carbonation and a malty body with caramel notes and 5.2%
ABV.
4. Hefeweizen – blend of wheat and barley malt; 5.2% ABV
5. Weihnachtsbier – speciality Christmas beer with 5.9% ABV.
6. Oktoberfest – mixture of noble German hops with 4.6% ABV.
Figure 1A: Product identification
Figure 2: WEST Bar & Restaurant
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APPENDIX B: QUESTIONNAIRE
Strategy:
1. What is the approach towards strategy – Market based or resource based?
2. What are the threshold competencies that are essential for west brewery?
3. What are your distinct competencies?
4. Do you have an operations strategy? If yes what is the process of building operations
strategy?
5. What trade-offs have u done?
6. What is your value proposition?
7. What will be your ops strategy for expansion?
8. What trade-offs do you foresee during expansion?
Product and Services Design:
1. Target markets of the products (which product for pubs, which for retail, which for
export, any customized products etc)
2. Operational challenges faced due to this current product / service mix.
3. Are you developing new products? If any big customer wants you to add any new
product would you be open to the idea?
4. Product design process. In this case how recipe is chosen and implemented?
5. Do you have a process platform? Would you like to have one?
6. Do you have process for mass customization of your products?
7. How do you maintain consistency?
8. When expanding are you planning to develop new products?
9. Will you customize products for Tesco? If yes what changes and how?
10. Do you have Back office and front office process for services?
11. How do you judge the response of customers to your product?
1. What is the current capacity of your plant?
2. How do you adjust Capacity?
3. What are the constraints of capacity?
4. What is the designed capacity of the machinery?
5. What is the effective or expected capacity?
6. What is the actual capacity you produce?
7. How do they forecast demand?
Do you produce to capacity
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Produce to match demand
8. How do you deal with changes in demand?
9. Is demand dependent on any factors? (Ex: seasonal etc.)
10. Are there fluctuations in demand and how do you cope with it?
Forecasting
11. How do you forecast demand?
12. How accurate and effective is it?
Capacity strategies
13. Do you maintain a fixed level of production?
14. Do you try to produce to match demand?
15. Do you try to manage demand?
Ex: varying prices, incentive, additional marketing
16. What type of long and short term plans are carried out?
17. What kind of feedback and control systems available?
Customer’s perception of waiting in queues (only for restaurant)
18. Do you have long queues at the restaurant?
19. How do your customers feel with waiting in queues?
Process Design
1. Are there different manufacturing equipments for diff. products or the same setup is
modifying as per requirement?
2. Is the manufacturing process automated or is there manual intervention?
3. What is the level of customization involved?
4. What is the capacity planning/inventory management. and forecasting methods
involved?
5. Transition from one function to another (hands off)
6. Layout of the production centre
7. Process Control techniques involved
8. Storage system in place
9. Extent of use of modern technology
Innovation and Improvement
1. Any specific failure of an equipment/control system/ process
2. Wastage of brew due to lack of quality.
3. How they arrived at a need for launching new product. Survey?
4. If short capacity Instead why don’t they use this rather than launching new.
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5. Consumer/customer involvement in product development (how they have used this in
their proposed launches.
6. Average cost of beer/litre compared to industrial average.
7. Utilities consumption break up
8. After expansion how would they manage the distribution channel
9. Demand Vs supply?
10. Paradigms?
11. Diversification of products cider/more beverages/whisky/fruit beers?
12. Vision statement for brand establishment.
13. How ideas are filtered and developed further? By whom? Aligned with business
strategy.
14. How the idea of new product was developed from concept to reality.
Supply Chain
1. Where is the machinery sourced from?
• Dealing with upkeep, spares, suppliers, regular maintenance
2. Where is the raw material sourced from?
• What is the frequency, how is it managed, relationship with suppliers?
3. What are the materials sourced?....... water, grain,
4. What is the bottling process?
• Outsourced
• In-house – sourcing the bottles?
5. Third Party Logistics.
Quality
6. What are the quality checks in place?
• German
• ISO
7. Quality checks for the product?
8. Quality checks for the machinery if required (relating to ensuring standards)?
9. Internal quality checks?
10. External quality checks?
11. Training employees?
12. Changing standards for new innovations?
13. Ensuring quality of products used in the process?
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APPENDIX C: ASSUMPTIONS
1. Role of staff are clearly defined.
2. The company has a procurement and inventory control departments.
3. Heat recovery potential is 100% explored and utilized.
4. Average 25% cost reduction in energy costs is possible after recovery of all
steam and condensate. The assumption is done by consulting one of the
team members who is an experienced mechanical engineer from
manufacturing industry.
5. No formal forecasting and planning methods for demand projections.
6. The supply chain is limited to one or two suppliers with no special
relationships and material is sourced from various distributors at competitive
prices.
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APPENDIX D: TABLES
Table: 1 Beer, Cider and FAB sales Volume in Europe, the US and Japan (litres m),
2007-2011. Source: Data monitor
2007 2008 2009 2010 2011 CAGR
07-11
France 2,200 2,190 2,181 2,173 2,167 -0.4%
Germany 9,175 9,702 9,690 9,680 9,671 -0.1%
Italy 1,851 1,880 1,909 1,937 1,965 1.5%
Netherlands 1,365 1,372 1,379 1,385 1,393 0.5%
Spain 3,199 3,235 3,273 3,308 3,340 1.1%
Sweden 535 538 542 545 549 0.7%
Table 2: Forecast share of throat by type of beer in Europe, the US and Japan, 2007-
2011. Source: Data monitor
% servings* Europe USA Japan
Standard lager
Premium lager
Ales, stout &
bitters
Speciality beer n/a
Low/no alcohol
beer
Cider
FABs
*as per percentage of all alcoholic drinks servings, =increasing share; = decreasing share